The spectrum of alternatives

Alternatives include a spectrum of assets, strategies and structures, each designed to deliver different benefits. Alternative investments strategies, while not guaranteed, may help meet specific objectives and complement a traditional portfolio allocation.

Alternatives complement traditional portfolios

Investment Objectives

Investmenttypes

Traditionalinvestments

Equities

Large, mid, small, growth, value, international, emerging markets

Alternativeinvestments

Capitalpreservation

Growth

Income

An investing strategy that seeks to minimize volatility by profiting from long positions in stocks that are expected to appreciate in value and short positions in stocks that are expected to decline in value.Long/short equity

Venture capital aims to provide financing to promising start-up and early-stage companies in exchange for an equity ownership stake.Venture capital

High net worth individuals and institutions may invest in private equity funds, which purchase and grow private companies. Private equity funds can also provide financing to companies seeking to expand, enhance operational efficiencies and make capital structure improvements, usually in exchange for common equity.Private equity

Fixed income

Treasuries, investment grade, high yield, emerging market debt

Senior secured loans are the primary source of debt financing for private companies. These loans are typically “secured,” or backed by a company’s assets. They also typically have floating rates, which adjust with changes in market interest rates.Senior secured loans

With event-driven credit, an investment is made in the debt of companies experiencing a corporate event, such as an acquisition, merger or reorganization that may result in market price inefficiencies.Event-driven credit

Debt is typically labeled distressed when the issuing company may face difficulties meeting its financial obligations.Distressed debt

Real assets

REITs,long-only commodity

For purposes of investment, real estate generally refers to commercial real estate. Institutional investors, such as endowments and pension funds, may own commercial real estate directly with the goal of achieving rental income. Smaller investors may access real estate through single manager or fund of funds investment vehicles.Real estate

Investing in alternatives is different than investing in traditional investments such as stocks and bonds. Alternatives tend to be illiquid and highly specialized. When building a portfolio that includes alternative investments, investors and their financial advisors should first consider an individual’s financial objectives. Investment constraints such as risk tolerance, liquidity needs and investment time horizon should be determined.

An investment in any fund sponsored by FS Investments involves a high degree of risk and may be considered speculative. Investors are advised to consider the investment objectives, risks, and charges and expenses of the applicable fund carefully
before investing. For funds offering shares to new investors, the applicable fund’s prospectus contains this and other information. Investors may obtain a copy of the applicable fund’s prospectus free of charge at www.fsinvestments.com or by contacting FS Investments at 201 Rouse Boulevard, Philadelphia, PA 19112 or by phone at 877-628-8575. Investors should read and carefully consider all information
found in the applicable fund’s prospectus and other reports filed with the U.S. Securities and Exchange Commission (SEC) before investing.

This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. An offering is made only by a prospectus, which must be made available to you in connection with this offering. No offering is made to New York investors except by a prospectus filed with the Department of Law of the State of New York.

Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in any of the funds sponsored by FS Investments may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.